Trade union boss Hans-Christian Gabrielsen was claiming “one of the best settlements we’ve had for many, many years” on Monday, after employers’ organization NHO finally agreed to wage hikes of 3.2 percent after 14 hours of negotiations in overtime. The raise comes, though, at a time when executives at NHO member companies are raking in more millions in pay and benefits.
Gabrielsen had reason to be pleased by the general increase his trade union federation LO and the YS federation secured. It amounts to NOK 2.50 per hour, or NOK 4.875 a year, plus an extra NOK 2 per hour for those at the lowest end of the pay scales. They can also secure additional pay hikes at the local level.
The unions had fought a tough battle to win “their piece of the pie” for workers who have “shown moderation” for the past several years. Wage growth has been low or non-existent, and both Gabrielsen and his trade union colleagues were determined to win some real growth in purchasing power for their members. With inflation expected to run at around 2.4 percent this year, the 3.2 percent basic raise achieves that, with the pot sweetened by the extra relief granted to the lowest-paid workers, many of whom are women.
Sets the standard
A strike would have pulled around 25,000 workers off the job nationwide at around 750 companies. Many of them work as cleaning staff, miners, security guards, hair dressers, elevator repair crews or construction workers. Companies that faced disruption included Telenor, some large hotels in Oslo, delivery firms PostNord, DHL and Bring, state power firm Statkraft, food producers Mills, Idun and Nora and beverage maker Ringnes. Grocery delivery to the REMA 1000 chain would have stopped, for example, and several ferry lines would have had reduced staffing.
Gabrielsen stressed that wage development has been “very poor” in recent years, when labour unions went along with minimal settlements during a period of higher unemployment after oil prices collapsed. The economy has since improved and he clearly felt a need to deliver a better wage package to members. The LO-NHO settlement hammered out in mediation also sets the standard for wage hikes in Norway in general.
Executives, meanwhile, rake in millions
It also comes at a time when even executives at large companies that have delivered poorer results, like Norsk Hydro for example, have continued to secure bonuses on top of lucrative pay packages. Newspaper Dagens Næringsliv (DN) reported last week how outgoing CEO at Norsk Hydro Svein Richard Brandtzæg, for example, secured a bonus of NOK 2.7 million (USD 318,000) last year even though Hydro’s share price is half what it was in the fall of 2017. His bonus was lower than in prior years, but it still came in addition to shares and salary, for total compensation of NOK 9.4 million. The company’s contribution to his pension fund jumped from NOK 3.6 million to NOK 5.8 million in 2018.
At privately owned investment firm Kistefos, meanwhile, owner Christen Sveaas gave his CEO Bengt A Rem a bonus alone of NOK 20 million, according to DN, after the company delivered record results of NOK 1.9 billion last year.
Newspaper headlines last week were also dwelling on how Telenor, which is 54 percent-owned by the state, had paid NOK 6.8 million to Berit Svendsen when she finally felt compelled to resign following a long conflict with CEO Sigve Brekke. She then quickly started as leader of Vipps, the digital payment system controlled by DNB, in which the state has a 34 percent stake. She’s now earning a reported NOK 2.1 million per year plus pension contributions of NOK 1.1 million.
“Time and again we hear that management salary levels in state-owned companies must be controlled,” newspaper Dagsavisen editorialized. “The question is when we will see that happen.” There’s also been outcry lately over the raises and high salaries paid to leaders of other state-owned companies, like when Eldar Sætre, the CEO of Equinor (formerly Statoil), received a 32 percent hike in compensation to nearly NOK 15 million. That’s 10 times the pay hike extracted from NHO on Monday.
“I think this is organized greed and completely ridiculous,” claimed Audun Lysbakken, leader of the Socialist Left party (SV). Even the long-troubled railroad BaneNOR nearly tripled its number of executive positions with CEO Gorm Frimannslund earning NOK 2.8 million last year.
The government’s trade minister, Torbjørn Røe Isaksen, defended all the multi-million salaries on the grounds they need to be competitive “in order to get the right leaders.” Executive pay in Norway, despite the country’s high costs, also tends to be lower than abroad, and far below that paid in the UK and US.